How Are Equity Method Investment Disclosures Different for IFRS Companies

question 18

Multiple Choice

How are equity method investment disclosures different for IFRS companies than for U.S. GAAP companies?

• A) IFRS requires additional disclosure related to fair value measurement used when the fair value option was elected.
• B) IFRS require all fair values to be reported, while GAAP only requires disclosures of fair value if the fair value option was elected.
• C) IFRS requires additional disclosures for summarized financial information of the investee, including total assets, liabilities, income and loss.
• D) IFRS requires more detailed disclosures explaining the areas where significant influence was exerted over the investee during the reporting period.

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Definitions:

Accounts Payable

Liabilities owed by a business to its suppliers or vendors for goods and services purchased on credit.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting liabilities, representing ownership interest held by shareholders.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year, calculated as current assets divided by current liabilities.

Net Plant

The total value of a company's property, plant, and equipment minus accumulated depreciation, representing the net book value of physical assets used in operations.